Most Businesses Slow Down During a Recession — Here's How to Keep Pace and Grow Your Company in 2023 Surviving a recession is a challenge for businesses at any stage, but it is achievable. Here are a few tips to help your company thrive.
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Market cycles often present opportunities for leaders from all fields of work — whether it's real estate, tech, finance, healthcare or a number of other industries — to scale and pivot their businesses, prioritize talent and retake market share. In times of a market downturn, entrepreneurs may need to adjust their approach to see their teams and clients to the other side. Surviving a recession is a challenge for businesses at any stage, but it is achievable.
Throughout my career, I've navigated economic uncertainty while working in real estate and have weathered storms and come out more competitive than ever. Here are a few tips to help you keep pace and grow your business even during times of uncertainty:
Take calculated risks
An important trend to consider as part of your business plan is understanding how your industry reacts during a down market and anticipating that. For example, with real estate starting to soften across the country, capitalization rates, or expected rate of return on an investment property, start to grow. Our current strategy is to gather as much real estate nationwide as possible — including in Georgia, Oklahoma, Texas and Utah — and take advantage of the softening market and recession, in which other investors are more hesitant and less into taking risks.
But we believe we can safeguard our risks by being prudent and doing our research into these burgeoning markets. What areas of weakness can you take advantage of in your industry? Is decreased demand causing lower prices for parts? Does increased demand allow you to raise prices for your goods or services? Audit the landscape, and see where you can find those calculated risks.
Pivot if needed
I have been in the real estate business for more than two decades and witnessed the 2008 Great Recession. At the time, my previous firm was invested in industrial real estate, which quickly dropped in value as the market collapsed. Instead of closing up shop after selling at a loss, we decided we could stay in business by pivoting into senior housing, assisted living and memory-care facilities.
We learned that these were more stable investments, so my team and I took a leap of faith and successfully changed course. Evolving as a business is critical to keep momentum; if you're not growing, you're dying. Thinking ahead, innovating and staying a step ahead of the game are important to keeping momentum during turbulent times.
Lead with vision
As a business owner, regardless of your industry, understanding how to lead during a time of chaos, such as a recession, is critical to the survival of your company. Although the path forward isn't always crystal-clear, staying connected with your guiding principles can help you navigate any uncertainty you might face as a business owner.
If you're unsure of what those principles are, tune into your "inner voice," and make sure that the decisions you make align with your values, as well as the values of your business. Make sure your team members are clear on your company's mission statement and vision as well, to maximize alignment companywide.
Grow your team
Something to consider is continuing to grow and invest in your team so you're ready for when the market cycle swings back up and business returns. Your people are the engine of your business. With continued layoffs across industries, there may be a growing pool of talent to choose from. During this cooldown period, as you're innovating your business and expanding your company's capabilities, make sure you have the right talent in place. I offer tips on how to attract the right team members in a previous Entrepreneur article.
Keep in mind, fortifying your business from a talent standpoint doesn't have to mean hiring. It can instead mean reminding current employees of your company's values, as well as sharing with them your business model and vision for the future.
Remember, market cycles are temporary
A recession doesn't necessarily have to be viewed as a bad thing; to me, it's an opportunity for entrepreneurs to build and adjust, carrying themselves and their teams to the other side and to a better, future market cycle. All market cycles are temporary, so this, too, shall pass. Issues like softening real estate, higher interest rates, economic uncertainty and market volatility are cyclical.
Regardless of which industry you're in, you can learn and grow from something negative like a recession by growing your business, pivoting it as needed, investing in the right people and quite simply weathering the storm in hopes of a clearer, brighter future.